Most Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are roughly 13,000 individuals that file for bankruptcy each year in Australia. It’s extraordinary how fast people can go from enjoying a healthy financial position to facing a mountain of debt. Commonly, events like loss of income, divorce, or unforeseen medical costs will generate serious financial challenges within just a few months. Rather than wrestling with these debts for several years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial support immediately.
Just recently, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy time frame from 3 years to 1 year. If this bill is passed, it will have a powerful impact on the stigma related to bankruptcy and the financial consequences that bankrupts will experience in the future. Although lots of people understand the principle of bankruptcy, many people wouldn’t know where to start if they determined that filing for bankruptcy is the best option for them. To give some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Get guidance from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best solution for you, always speak to a registered bankruptcy trustee prior to making any concrete decisions. There is a significant difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, bankruptcy firms are not the same as registered bankruptcy trustee firms, so be sure you get the right advice the first time so you can make the best financial decision. The right advice will not only assist you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.
- Download the forms required to declare bankruptcy
If you’ve made the decision that bankruptcy is the best choice for your individual situation, there are two sets of documents that you will need to complete for you to declare bankruptcy:
- The Debtor’s Petition, which is a 3 page document (click here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/debtors-petition).
- The Statement of Affairs, which is a 25 page document (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Compile your supporting documents.
In almost all bankruptcy cases, individuals need to provide evidence that their claims are correct by supplying numerous supporting documents. Typically, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a business owner)
- Centrelink benefits statement (if appropriate)
- Formal child support notices
- Any family law orders
- Any court orders
- Wills of any deceased estate of which you are the beneficiary
- All transaction statements from transferred assets over the last 5 years
It is integral to note that failure to provide accurate information or any attempt to hide information that would normally relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to each question in your bankruptcy paperwork accurately and honestly to make sure it gets processed properly. It is very important that you include the address information of all your lenders in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to provide at least two types of ID. If you’re unclear of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you run out of space when answering any questions, simply print out another copy of the same page and use it to fill in additional information. Moreover, be careful to include all assets sold in the last 5 years in question 33.
- Lodge your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, inspect the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Brisbane, we understand that all the paperwork can be a bit confusing, so if you have any concerns regarding your any of your answers, it’s best to contact us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsbrisbane.com.au.